Staunton spectator. [volume] (Staunton, Va.) 1849-1896, 1887-12-28
The Debt Situation in Virginia.

The circular of J. L. Williams & Son, of
Richmond, Va, bankers, describes briefly
the present state of the Virginia debt ques-
ton. "Whatever the extent of the Supreme
Courts recent decision, it says, 1.-THE act
of May 12, 1887, now stands az mighty
barrier, a grievous embarrassment and
powerful threat against the use of coupons.
Practically the bondholders have lost their
guarantees, and are at the mercy of the
State. Even if bondholders are willing to
continue litigation, there will be few tax
payers who will lend themselves for the
purpose. To save a small amount of taxes
they will not encounter the trouble and ex-
pense of using them." The user of coupons
as matters now stand, has hard lot. If
he tenders them in payment of taxes and
stands to his tender he will certainly be
prosecuted to judgment which is lien on
all his real estate, and to an execution. to
avoid or stay which requires new and ex-
pensive litigation. Under these circum-
stances the ten forties have now declined to
about their fundable value and are being
rapidly funded under the Riddleberger act.
OF this class of bonds there are about 81,
900, 900 still unfunded. The consols, of
which there are about $13, 900, 900 outstand-
ing, are still selling for about IS per cent.
above what they would be worth if funded
into 8s under the Riddleberger act, and
they are in consequence not being funded
This Is per cent. is therefore the interval
between the State and its creditors. As
there is desire on both sides to reach a
settlement, it is thought to be probable
that the interval will be bridged by a com
promise. The Riddleberger act will GER
tainly, it is held, be the basis of any settle
ment that may be made, and it is thought
probable that the Legislature, in order to
speed settlement Of a very troublesome
matter, will offer the holders of old conscl
bonds terms somewhat more liberal than
those of the Riddleberger funding act
That act authorizes the funding Of consols
at 50 per cent. of their face value In 3s,
which sell at present for about 81. Cou-
pons matured on July 1, 1882, and before
are fundable at par those matured on July
/, 1885, and after have lost the privilege OF
being funded. Those matured between
July, 1882, and July, 1885, are fundable at
so per cent. of their face. In his recent
message Governor Lee estimated the an.
nual interest charge upon the State debt,
in case all the consols and ten-fortes should
be funded under the R:ddleberger act, at
$65s, 900, which charge the State was able,
in his opiEion, to meet without increase OF
taxation. At present, consols are selling at
about AZ. What the State has to induce it
to permit them to be funded at figure APP
preaching AZ is the p ssibility that the
Supreme Court Lay, in its vagaries of opin-
ion, render some future decision as unfavor-
able as the last decision was favorable, and
thus again, as twice before, reyolutionize
the situation. What the States creditors
have to consider is the prospect of de-
cline of the present market price of cousols
and continuance of unfavorable legsia-
ton in regard to the funding of consol
coupons. Evidently there is in view fair
prospect of settlement which will remove
from politics very demoralizing question:
and enable the people of Virginia to turn
their attention to the development of their
material resources. Such a result is GER
tainly desirable to all concerned. A spirit
of RESPONSIVENESS will prevail, we trust, in
the negotiations now preceding, and pro-
duce in the end conclusion satisfactory,
in view of the actual facts, to both parties
to this old controversy.